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Defective interfering (DI) RNAs arise during influenza virus replication, can be packaged into particles (DIPs) and suppress spread of wildtype (WT) virus. However, the molecular signatures of DI RNAs and the mechanism underlying antiviral activity are incompletely understood. Here, we show that any central deletion is sufficient to convert a viral RNA into a DI RNA and that antiviral activity of DIPs is inversely correlated with DI RNA length when induction of the interferon (IFN) system is disfavored. When induction of the IFN system was allowed, it was found to be the major contributor to DIP antiviral activity. Finally, while both DIPs and influenza virus triggered expression of IFN-stimulated genes (ISG) only virus stimulated robust expression of IFN. These results suggest a key role of innate immune activation in DIP antiviral activity and point towards previously unappreciated differences in DIP- and influenza virus-mediated activation of the effector functions of the IFN system.ImportanceDefective interfering (DI) RNAs naturally arise during RNA virus infection. They can be packaged into defective interfering particles (DIPs) and exert antiviral activity by suppressing viral genome replication and inducing the interferon (IFN) system. However, inhibition of influenza virus infection by DI RNAs has been incompletely understood. Here, we show that induction of the IFN system and not suppression of genome replication is the major determinant of DIP antiviral activity. Moreover, we demonstrate that DIPs induce IFN-stimulated genes (ISG) but not IFN with high efficiency. Our results reveal unexpected major differences in influenza virus and DIP activation of the IFN system, a key barrier against viral infection, and provide insights into how to design DIPs for antiviral therapy.